If it does nothing else, the Portland Housing Bureau should work on spending public dollars more efficiently and transparently. Such is the Cliff’s Notes version of a recently released audit, which reported, among other things, that the bureau may recover only 15 percent of its $357 million portfolio of outstanding loans.

The audit offers good advice, and the Housing Bureau should take it. But affordable housing need not be provided through spending alone, which is a good thing considering the outlook for some important sources of housing dollars. Tax increment funds, a product of urban renewal areas, are expected to drop from the $40-$54 million range to a “new normal” of $17-$23 million beginning in fiscal year 2015, the audit reports. Crucial sources of federal money are expected to sag, too.

So, in a fiscally constrained environment that may become even more constrained, what else can and should the city be doing to ensure that modest-income Portland residents can find a place to call home? That’s a sweeping question to which potential responses are probably numberless. But one proposal, made by Commissioner Dan Saltzman, is certainly promising.

As reported by The Oregonian’s Melissa Binder, Saltzman would like the city to offer a floor area ratio bonus for rental projects that contain some affordable housing. Saltzman, who oversees the housing bureau, would like to present something concrete to his colleagues within six months.

Offering additional density, of which floor area ratio is one measure, in exchange for a community benefit is not a new idea in Portland. Projects in parts of the city center can earn density through the inclusion of various amenities, including the following: day care space, roof-top gardens, water features, locker rooms and residential units. There’s also a middle-income housing bonus option, middle income being 150 percent of the area median family income. Developers may also buy additional density by contributing to an affordable housing fund. But there’s no bonus for modest-income affordable housing per se.

Density bonuses are available in some areas outside of the city center as well. Projects in multidwelling zones, for instance, can earn density bonuses by including amenities designed to increase livability. These range from children’s play areas to three-bedroom units. But here, as well, there is no specific bonus for affordable housing.

What Saltzman would like to do, he told The Oregonian editorial board Thursday, is establish a floor area ratio bonus for affordable housing and, further, make it the “preeminent” source of density bonuses. The idea is far from fully formed, and Saltzman says he’s merely trying to “get the conversation going” at this point. Broadly speaking, though, an affordable housing bonus would gain preeminent status partly through the elimination of other bonus options whose public policy benefits may be less important than affordable housing.

The success of Saltzman’s density bonus would depend, ultimately, the value of additional floor area relative to the cost of adding affordable housing. This would be true even if the City Council agrees to zap some of the bonus options that might provide competition. Creating a bonus option is no guarantee that developers will use it. But that’s why proposals are discussed before they’re adopted (or rejected), and this one certainly deserves to have its tires kicked and its oil checked.

Even if successful, Saltzman’s proposal is likely to produce only a modest increase in the city’s affordable housing supply and, thus, play only a bit part in advancing any overarching housing policy. But the resulting increase in housing is one the city wouldn’t have to pay for directly, and the mechanism would employ incentives rather than potentially costly mandates. What’s not to like?